U.S.-listed Tower Semiconductor shares jumped in premarket trade after the company said the government of Japan would help fund the chip maker's expansion in the country.

Tower's Nasdaq-listed shares rose over 18% premarket to trade at $271.90. Shares are up over 95% so far this year to Monday's close.

The Israeli chip manufacturer said it will spend $3 billion on expanding its chip production in Japan, with $1 billion coming from a Japanese government grant.

Tower will ramp up production of silicon photonics and silicon germanium chips in response to long-term customer demand, the company said. The chips are used in fiber-optic and cellular networks, respectively.

The move boosts Japan's domestic chip supply amid a global race between countries to establish onshore chip making capacity.

As a result of the investment, Tower upgraded its profit and revenue outlook. The group now targets revenue of $3.6 billion and net profit of $1.2 billion in 2028--a significant rise on the company's previous forecast for annual revenue of $2.8 billion and net profit of $750 million.

Tower entered into a joint venture with Panasonic Semiconductor in 2014, giving the group a foothold in the Japanese market.

The group announced a restructuring of its Japan operations in March, which will result in Tower taking full ownership of its Japan-based factory making 300 millimeter chips. As part of the restructure, ownership of a facility making 200 millimeter chips, in which Tower currently holds a majority stake, will transfer to Nuvoton Technology.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

July 14, 2026 06:18 ET (10:18 GMT)

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